[Czech Republic] Calculation of holiday entitlement – Part 2

In our last article from 10 April 2024 we showed the basic principles of calculating holiday entitlement. Now we will look at the special cases where an employee’s weekly working time changes during the year and we will show more examples.

The Labour Code does not give specific guidance on how to proceed if an employee’s weekly working time changes during the year. Thus, there are several opinions on how to deal with such a situation. The most logical approach seems to be to calculate the so-called average (fictitious) weekly working time.

From the previous article, we already know that holiday is always assessed over the whole year and for calculating it we use, among other things, the weekly working time. However, if the weekly working time changes during the year, we have more weekly working times. To get only one we that need for the calculation, we have to calculate the average weekly working time by taking a weighted average of all the weekly working times. The weight here will be the number of calendar days that the weekly working time lasted.

Example 1: The employee had from 1 January 2024 to 31 May 2024 (152 days) a weekly working time of 40 hours. From 1 June 2024 to the end of the year (214 days), he then worked only a 20 hour a week. What will be the average weekly working time (AWWT)?

AWWT=(40*152+20*214)/366=28,306011

We count this weekly working time in all calculations. Thus, we use it to calculate the annual holiday entitlement, the final holiday entitlement, and we also use it to assess the limits of 12 times and 20 times the weekly working time when determining whether and to what extent we can count so-called limit absences in the time worked.

If the employee’s contract of employment did not last for the whole calendar year and there was a change in the weekly working time during the contract, we would of course count only the days of the contract. Let’s illustrate with an example.

Example 2: An employee entered employment on 1 May 2024 with an agreed weekly working time of 22 hours. From 1 July 2024 to 31 August 2024, he agreed with the employer to increase his working hours to 40 hours. Then, from 1 September 2024 to the end of the year, he worked only 14 hours per week.

AWWT=(22*61+40*62+14*122)/245=22,571429

We will now look at a more complex example of calculating holiday entitlement.

Example 3: An employee has a basic holiday entitlement of 4.2 weeks. He joins the employer on 1 March 2024 with a full-time 40-hour week. From 1 July to 30 September, he worked 35 hours per week and from 1 October to the end of the year he worked 22 hours per week. He actually worked 410 hours in 2024. He did not work 56.6 hours because of the holidays. He did not work 973.8 hours due to illness.

1. Calculation of average weekly working time: (40*122+35*92+22*92)/306=33,084967.
2. 12 times the weekly working time: 12*33,084967=397,02 hours.
3. 20 times the weekly working time: 20*33,084967=661,70 hours.
4. Full-year holiday entitlement: 4,2*33,084967=138,9569 – rounded up to the nearest whole hour: 139 hours.
5. This means that the 12 times weekly working time was fulfilled and we can count the limit absences in the maximum amount of 20 times weekly working time. Therefore, we cannot count the full 973.8 hours. We can only count 661.7 hours.
6. We determine the number of multiples of weekly working time: (466,6+661,7)/33,084967=34,1031
7. We calculate the final holiday entitlement: (34/52)*139=90,88. After rounding: 91 hours.

Another more complicated situation is the calculation of holiday entitlement for mothers taking holiday between maternity and parental leave. Maternity leave and ordinary holiday are always counted as working time without limit. However, parental leave, is a limiting absence, so it can only count towards working time if at least 12 times the weekly working time has actually been worked (including absences without a limit) and the maximum amount of working time that can be counted is 20 times the weekly working time.

So, when the holiday entitlement is calculated, it may happen that the newly accrued holiday increases the holiday entitlement again and the person calculating the entitlement has to repeat and update the calculation several times to get the final result. Let’s try to look at an example.

Example 4: An employee works for her employer all year round on a 40-hour contract. The basic entitlement of holiday is 5 weeks. She has spent 475 hours on maternity leave. The remainder (1621 hours) would otherwise be parental leave. She has no untaken holiday from previous years.

1. Annual holiday entitlement: 5*40=200
2. 12 times: 480 hours
3. 20 times: 800 hours
4. We count working hours at all times and without limit: 475. The 12 times limit has not been fulfilled and we cannot count anything from parental leave.
5. Multiples of time worked: 475/40=11,875
6. Holiday entitlement: (11/52)*200=43 hours

However, we now have to look at whether the newly calculated holiday will affect our overall holiday entitlement. The working hours have increased from 475 to 518. This also means that the 12 times limit has been met and so we can count some limit absences towards hours worked, which have reduced from 1621 to 1578. So we will go ahead and recalculate the entitlement.

7. Multiples of time worked: (518+800)/40=32,95

8. Holiday entitlement: (32/52)*200=124 hours.

The entitlement increased, so we need to check again that the increase didn’t change the total holiday entitlement. Working hours have increased from 518 to 599 hours. Limit absences have decreased from 1578 to 1497 hours.

9. Multiples of time worked: (599+800)/40=34,975

10. Holiday entitlement: (34/52)*200=131hours.

The entitlement increased, so we need to check again that the total holiday entitlement didn’t change. Working hours have increased from 599 to 606 hours. Limit absences have decreased from 1497 to 1490 hours.

11. Multiples of time worked: (606+800)/40=35,15

12. Holiday entitlement: (35/52)*200=135 hours.

The entitlement increased, so we have to check for the fourth time whether the total holiday entitlement changed. Working hours have increased from 606 to 610 hours. Limit absences have decreased from 1490 to 1486 hours.

13. Multiples of time worked: (610+800)/40=35,25

At this stage there is no need to continue the calculation because we can see that the number of multiples of weekly working time didn’t change. It is therefore clear that the total holiday entitlement will remain the same at 135 hours.

In conclusion, we would like to add that the calculation of holiday entitlement is carried out in exactly the same way as in the case of agreement on the performance of work/agreement on work activities (DPP/DPČ) and standard employment contracts. The only difference is that the calculation is based on a notional 20 hours per week. It does not matter what agreed weekly working time is or how many hours per week the employee actually works or has worked in any period. The calculation is always based on a 20-hour week, so you could say that the calculation is a little easier for DPP/DPČ contracts.